Q1 2009 Costs to Buy a Business
How Much Is My Arlington Business Worth?
We just received the latest Arlington, Texas statistics on business valuations for First Quarter 2009.
Q1 2009 Business Valuations in Arlington, TX
According to statistics issued by BizBuySell.com, Arlington business-for-sale listings in Q1 2009 had a median asking price of $285,000.
That compares to a median ask price of $300,000 in Q1 2008. Given that Arlington, TX median business asking prices appear to be dropping, it suggests that larger Arlington businesses in may be holding off on selling until the economy turns around.
To be clear, this is the median asking price for a business. If you want to buy a business, you may be able to buy a Arlington company for much less. Alternatively, some Arlington businesses may be selling for much more.
Another thing to remember is that this is the asking price for a Arlington business. When a business owner lists a business for sale, they typically set a price that ends up being more than the eventual sale price. A sale-to-ask ratio typically might be between 0.85 and 0.90, but of course it depends on deal specifics. An owner who wants $275,000 might actually get between $233,750 and $247,500.
Number of Arlington Businesses for Sale in the Dataset
The study data comprised 990 listings in the Dallas-Fort Worth-Arlington, TX metro area. Many of the businesses in the dataset are outside of Arlington, but they are nearby and so are probably representative of Arlington business valuations.
One year ago, in Q1 2008, the BizBuySell.com dataset for Arlington spanned 1038 listings. In a market where you would think fewer business owners would be selling, it's a bit surprising to see more Arlington business-for-sale listings.
Arlington, TX Q1 2009 Revenue Multiples
In the Dallas-Fort Worth-Arlington, TX metro area, businesses will usually sell for 1.01 times the selling company's revenues. That was the mean revenue multiple for Q1 2009 in this part of the country.
In other words, a firm with revenues of $200,000 might list for $202,772. Remember, however, that this is just an average for revenue multiples in Arlington and surrounding communities. Some businesses will have higher revenue multiples and others will have lower revenue multiples.
According to BizBuySell.com, the median revenues for its business-for-sale listings was $434,602 in Q1 2009.
In terms of trending year over year, the Q1 2008 revenue multiple was 1.04 and the median revenue for listed businesses was $460,950.
Q1 2009 Cash Flow Multiples In Arlington, TX
Cash flow multiples are another common way to value a business.
For Q1 2009, the average cash flow multiple for listed businesses in the Dallas-Fort Worth-Arlington, TX metro area was 3.69.
So, a business with cash flows of $150,000 might have an asking price of $552,992. That's only if the firm complies with the local average. Most businesses will not conform to industry- or area averages.
If you are interested in what cash flows are for a business in Arlington, BizBuySell.com found that the median cash flow for Arlington area businesses was $108,110 in Q1 2009. In Q1 2008, cash flow multiples clocked in at 3.81 and the median cash flow was $110,000.
Things to Consider When Selling a Business in Arlington, TX
When selling a business, think about how dependent the business is on you as the business owner. If the business is heavily dependent on your skills and your personal reputation, a buyer will pay less money for it. As such, it's important to make the business less dependent on you as you approach the time when you hope to sell. This advice on how to sell a company comes from Domenic Rinaldi, managing partner of Sun Acquisitions, a leading business brokerage firm.
Business Valuations for Arlington, TX Businesses
If you are contemplating buying a business or selling a business and would like to get an estimated business valuation, we suggest you try the BizBuySell.com Business Valuation Tool. You can modify the dataset that creates business valuation estimates to meet your specific criteria. As a bonus, access to the tool is very affordable -- less than $100.
More Information on BizBuySell.com's Quarterly Reports
The BizBuySell Insight Report is published every quarter. If you find these trends interesting, take a moment to visit BizBuySell.com Insights Report for more information.
Historical Data for Arlington, TX Business Valuations
If you are interested in trends in business-for-sale asking prices, here are the median asking prices for businesses in the Dallas-Fort Worth-Arlington, TX metro area for the last 9 quarters.
Here is how median revenue multiples are trending in the Arlington area, based on BizBuySell.com's quarterly reports.
The table below shows how cash flow multiples are trending in the Arlington area, based on BizBuySell.com's quarterly reports.
Flow Multiple
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